Bills Establish Clear Requirements for Tiered Plans, Halt Implementation Until 2017
TRENTON – In response to the flawed process associated with the creation and approval of tiered health plans offered by Horizon BCBSNJ, Senate Commerce Chair Nia H. Gill and Senate Health Chair Joseph F. Vitale today introduced a four-bill package that creates specific requirements for tiered health insurance plans. The bills would ensure that any tiered plans created in New Jersey are established in an open and transparent manner and meet certain standards concerning quality, fairness and patient access to care. The bills would also place a moratorium on the implementation of any currently established tiered plans until 2017.
“The process undertaken to create and approve Horizon plans demonstrated a critical need to establish clear standards for tiered plans, which the Department of Banking and Insurance has unfortunately chosen not to appropriately regulate,” said Senator Gill (D-Essex, Passaic). “These new requirements would provide that the establishment of Horizon’s plans, and any other tiered plans, is done in an open and transparent process that better protects patients and health care providers across New Jersey.”
“The tiered plans were established in a way that leaves patients without adequate access to care and health care providers in our most challenged areas vulnerable to closure. It is imperative that we halt implementation until a process is in place that ensures fairness for residents and hospitals in the state,” said Senator Vitale (D-Middlesex). “These bills create a framework for the creation and approval of tiered plans to ensure they meet adequate coverage standards but also that the placement of providers in tiers is based upon measurable criteria.”
The first bill would place a moratorium on the implementation of any tiered health insurance plans that have been offered in calendar year 2015 until January 1, 2017. It would also require the insurance carrier of such a plan to provide a 30-day special open enrollment period for consumers who selected or were auto-enrolled in the tiered networks to choose among other offered health plans.
The second bill would ensure that the creation of tiered networks by insurance carriers is done in a manner that is open and transparent. The legislation would require that carriers disclose the selection standards for placement of health care providers in tiered networks, and provides for the appointment of an oversight monitor to review compliance of the bill’s requirements. The legislation is modeled after standards created by then-New York Attorney General Andrew Cuomo in 2007.
The third bill would create specific requirements for the approval of insurance plans by the state Department of Banking and Insurance. First, it would prohibit the commissioner from issuing conditional approval of network adequacy, which considers the scope and type of health care benefits provided by the carrier, the geographic service area covered by the network, and access to medical specialists. In the case of a carrier seeking approval of a tiered network, the preferred tier of the network would be required to meet all requirements for provider network adequacy. The bill would provide that network adequacy could not be met on a specialty-by-specialty basis. Specifically, each health care provider used to meet network adequacy requirements would have to be in the carrier’s network, or in the case of a tiered network, in the same tier for all covered services provided.
The final bill would require a carrier to report on its website or in any plan documents the actuarial value of a tiered plan. The cost sharing amount associated with the lowest or least preferred tier of the health benefits plan would have to be, at a minimum, actuarially equivalent to the cost sharing associated with a level of coverage for a silver health plan offered in the Health Insurance Marketplace created through the Affordable Care Act. Finally, the bill would require that any tiered network plan include University Hospital, and any other hospital that is designated an instrumentality of the state, in the highest or preferred tier of the network.
“As constructed, Horizon’s plans leave consumers vulnerable to a flawed structure that could make care, particularly in emergency situations, cost-prohibitive. It also creates winners and losers among health care providers in the state, leaving hospitals largely in urban areas at risk,” said Senator Vitale. “These bills create necessary protections when it comes to cost and access to care, but also ensures that tiered plans are created in a way that requires accountability from carriers.”
“Given DOBI’s approval process, it is evident the department is not capable of and has chosen not to address the newer tiered plans,” said Senator Gill. “The Legislature now needs to step in to ensure stronger oversight and clearer standards. These bills will better make sure that the health care of our residents does not suffer as a result of a business model that prioritizes profits. They will create standards under which fairness is the priority and access to care the goal.”